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"Data brokers" have increasing access to Americans’ personal info -- a multibillion-dollar industry that the government fears invades privacy

2014Mar 07

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Every day, the personal information of millions of Americans is being gathered and sold by companies most people don't even know exist. These "data brokers" have existed for decades, but have grown in strength, size, and invasiveness as a result of huge strides in the amounts of data that can be gathered, stored and used for many purposes. Steve Kroft delves into the mission and methods of the data brokers, which are now drawing the attention of lawmakers and government regulators worried about the privacy of American consumers. His story will be broadcast on 60 Minutes Sunday, March 9 at 7 p.m. ET/PT.

There are thousands of data brokers, Kroft reports, sifting through government records, online searches, credit card purchases and other places, hunting for personal and identifiable information. Among the data they collect: user names, political affiliations, sexual orientation, income, religion and medical issues, including depression or alcoholism. "You can buy from any number of data brokers by malady," says Facebook's former director of public policy Tim Sparapani. "The lists of individuals in America...afflicted with...cancer, heart disease, you name it down to the most rare," he says. And, says Sparapani, the information can wind up in a file sold to prospective employers or any entity a user may have business with.

Surfing the Internet may seem to be a solitary activity, but users are followed wherever they click, says digital privacy expert Ashkan Soltani. He used a program called "Disconnect" to reveal the presence of more than a dozen third parties used by a variety of websites that Kroft visited. On the monitor they appeared like a string of balloons. "These are all the companies that either place ads or measure people's behaviors on that site," says Soltani. "You've not invited them in and most computers or browsers allow them in by default," he tells Kroft.

Think "Angry Birds" or "Brightest Flashlight Free" phone apps are really free? They have been shown to be collecting their users' location information and other phone data and sharing it with analytic and digital advertising companies. This worries the Federal Trade Commission's Julie Brill, who wants to regulate the data brokers. "It's the kind of information that really talks about who you are...where you go...what time you come home."

Brill wants more oversight and transparency in the data broker industry so consumers can find out what is being collected, whether it's accurate, and if not, have the chance to correct it. The Senate Commerce Committee is proposing legislation to do just that. Its chairman, Sen. Jay Rockefeller (D-W.Va.), has been investigating the industry for more than a year and has accused three of the largest data brokers of not cooperating with Congress. The CEO of one of those companies, Bryan Kennedy of Epsilon, speaks to Kroft.

Kennedy says he provided "binders" of information to Rockefeller's committee and does not see the need for more oversight or regulation. He says he doesn't believe any abuses are taking place within his company. "We would be the first to raise our hand if there are specific uses of data that are problematic," he tells Kroft. "We think that self-regulation has been very effective." He says the government should go after specific abuses and not the entire industry "in a way that could cripple our economy completely," he says, referring to the $156 billion data-driven marketing industry, which helps facilitate Internet commerce.

Kennedy says he is surprised by how much Internet users willingly divulge about themselves. "I think that consumers ought to understand that the Internet is an advertising medium."